She said the demand was reflected in the over-subscription of the US dollar-denominated sovereign sukuk issued by Indonesia recently.

The sukuk received US$4.7bil worth of subscriptions, seven times over the US$650mil of the sukuk offered.

“In addition, the first issuance of an Islamic corporate debt in Europe worth 1bil euro (US$1.3bil) is also expected to be launched in June by a French financial institution,” Zarinah said.

Zarinah touched on several points and themes in her speech including the Malaysian regulatory philosophy and approach, development of the Malaysian Islamic Capital Market, strengthening linkages with Gulf Cooperation Council (GCC) and other markets, and the value proposition of Islamic finance.

The Malaysian regulatory approach to Islamic finance had evolved to provide viable investment and financing alternatives accepted by Muslim and non-Muslim investors, she said.

As for development, the Islamic capital market is dominant in Malaysia, developing to a point that 87% of listed securities accounting for 65% of total market capitalisation on the stock exchange is syariah-compliant.

On the value proposition of Islamic finance, Zarinah said: “Islamic finance has much in common with the objectives of regulation of the financial system and offers much in terms of promoting financial stability through its inherent prudent and socially-conscious orientation.”